Argentine peso falls to 2002, crisis level lows

BUENOS AIRES Jan 26 (Reuters) - Argentina's peso
ARS=RASL fell on Monday as the central bank bought dollars
early in the day in a bid to strengthen reserves, pushing the
local currency to lows not seen since the country's 2002
financial meltdown.

The bank is also trying to keep the peso competitive
against the currency of major trade partner neighboring Brazil.
The Brazilian real has fallen against the dollar in recent
weeks. A weaker local currency bolsters a country's exports.

Private Argentine investment funds also sought greenbacks
ahead of more expected central bank dollar purchases, helping
to push the local currency down 0.07 percent to a closing
interbank level of 3.4800/3.4825 per dollar.

The peso had slid as low as 3.4875 per dollar during the
session, but toward the end of trade the central bank reversed
course and started buying dollars to halt the peso's slide.

"The market was slowed when the central bank intervened
with dollar sales, whereas earlier the bank had been continuing
with its dollar purchases," one market player said.

The peso has not been this weak since Argentina's shock
currency devaluation in 2002, which was accompanied by the
world's biggest sovereign debt default and an economic crisis
in the South American country.

In informal trade between foreign exchange houses, as
measured by Reuters, the peso currency closed at 3.5200/3.5250
per dollar ARSB=.

Argentine government bonds traded over-the-counter in
Buenos Aires rose 1.0 percent on average as the market awaited
the results of a loan swap to be carried out by the government
this week aimed at improving the country's debt profile.
(Reporting by Jorge Otaola, writing by Hugh Bronstein, Editing
by Chizu Nomiyama)